Policy reforms needed to boost manufacturing

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Policy reforms needed to boost manufacturing

Thursday, 25 January 2024 | Jay Shah

Policy reforms needed to boost manufacturing

By creating an environment conducive to manufacturing, India can attract investments and become key player in the global manufacturing hub

With the swift expansion of India’s manufacturing sector, the country is poised to become a leading global manufacturing force. Currently positioned among the top three preferred global manufacturing locations, India has the potential to boost its exports to an impressive USD one trillion by 2030. However, within the spectrum of various supply chains, the challenges and opportunities of Indian manufacturing are evident in the wooden pallet sector. To consolidate its position in the pallet industry, essential policy reforms are necessary for sustainable growth and global leadership. Indeed, critical policy changes are required for India to smoothly transition into a global manufacturing hub, ensuring enduring growth and competitiveness on the international stage.

Infrastructure Development

India needs to focus on developing robust infrastructure, including transportation, power, and telecommunications, to support the manufacturing sector. The government should invest in building modern industrial parks, logistics hubs, and efficient transportation networks to reduce manufacturing costs and improve competitiveness.

Sustainable Manufacturing

In the era of increasing environmental awareness, sustainable and eco-friendly manufacturing practices are becoming imperative. The government should encourage manufacturers to adopt green technologies and sustainable processes by providing incentives and enforcing regulations that promote environmental responsibility. This not only aligns with global trends but also enhances the reputation of Indian products in international markets.

Simplified Regulations

The regulatory environment in India is complex, and businesses face bureaucratic hurdles. Streamlining regulations and creating a more business-friendly environment will encourage investment and growth in the manufacturing sector. Implementing a single-window system for approvals, clearances, and licenses can facilitate ease of doing business.

Skilled Labour Development

India’s education system needs to adapt to the changing needs of the economy by providing relevant skills training. Addressing the shortage of skilled workers in the manufacturing sector is crucial for its growth. The government should focus on creating appropriate skill sets among the workforce to meet the demands of modern manufacturing.

Government schemes

The government has introduced Production-Linked Incentive (PLI) schemes to promote domestic manufacturing and increase India’s share of global exports. These schemes encourage investments in manufacturing and provide incentives for various sectors, contributing to the growth of the manufacturing industry.

Foreign Investment

India's trade policies and foreign investment regulations play a significant role in attracting global manufacturers. The government should continue to focus on policies that promote domestic manufacturing, reduce import dependence, and encourage foreign investment in the manufacturing sector.

Tax Reforms

A competitive and stable tax regime is essential for attracting investment. India needs to rationalise its tax structure, ensuring that it is transparent and predictable. Reducing corporate tax rates, providing incentives for research and development, and promoting innovation through tax breaks will encourage manufacturing companies to invest and operate in India.

Becoming a global manufacturing hub requires a comprehensive and coordinated effort from the Indian government, industry players, and other stakeholders. The success of these reforms will not only boost the economy but also create employment opportunities and enhance India's standing in the world of international trade and commerce.

(The writer is an Industry expert, views are personal)

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